ACH v Allianz Australia Insurance Limited
[2021] NSWPICMR 35
•27 July 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | ACH v Allianz Australia Insurance Limited [2021] NSWPICMR 35 |
| CLAIMANT: | ACH |
| INSURER: | Allianz Australia Insurance Limited |
| MERIT REVIEWER: | Brett Williams |
| DATE OF DECISION: | 27 July 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS - Merit review; entitlements to weekly payments in accordance with section 3.8; Claimant alleges partial loss of earning capacity; Insurer disputes that the Claimant suffers a loss of earning capacity; Insurer argues that dispute about earning capacity constitutes a medical assessment matter in accordance with Schedule 2 clause 2(d) of the Motor AccidentInjuriesAct 2017 (MAI Act), and that the Commission does not have jurisdiction to determine the dispute as a merit review matter; Claimant submits that the dispute constitutes a merit review matter because it is about the amount of statutory benefits that is payable under Division 3.3 (Schedule 2 clause 1(a)), and that the Commission has jurisdiction to determine it as such; Held- Commission has jurisdiction to determine a dispute about earning capacity as a merit review matter; the dispute is not about “impairment of the earning capacity” of the Claimant; section 3.8 uses the term “loss of earning capacity” in section 3.8(1) and “post-accident earning capacity” in section 3.8(2); the term “impairment of earning capacity” is not found in section 3.8; while the term “impairment of earning capacity” is found in Part 4 of the MAI Act (sections 4.5(1)(a), 4.6(1)(a), 4.6(3), 4.8 & 4.9(1)(a)), that Part addresses entitlements to damages, not statutory benefits; a dispute about loss of earning capacity in the context of section 3.8 is a dispute about the amount of statutory benefits that is payable under Division 3.3; accordingly, it is a merit review matter; the Insurer placed too much weight on the Claimant’s ability to perform some overtime for a period after returning to work; by placing so much emphasis on this consideration the Insurer failed to adequately address the balance of the matters that are relevant to a determination of the Claimant’s post-accident earning capacity; reviewable decision set aside and remitted to the Insurer for reconsideration; Insurer directed to determine the Claimant’s post-accident earning capacity in accordance with Schedule 1 clause 8 and by reference to the totality of the relevant evidence. |
| DETERMINATIONS MADE: | The reviewable decision is about the amount of weekly payments of statutory benefits that are payable under Division 3.3 of the Act, and is therefore a merit review matter under Schedule 2(1)(a) of the Motor Accident Injuries Act 2017. 1. The reviewable decision is set aside and remitted to the Insurer for reconsideration. 2. In assessing the Claimant’s s 3.8 entitlements, the Insurer is directed to determine the Claimant’s post accident earning capacity in accordance with Schedule 1 clause 8 and by reference to the totality of the relevant evidence. |
Background
ACH (the Claimant) was injured in a motor vehicle accident on 20 July 2019 (the accident). The primary injuries sustained by him in the accident were to his neck, right shoulder and lower back.
Following the accident, the Claimant submitted a claim for statutory benefits to the Insurer. The Insurer accepted liability for the claim and paid statutory benefits to the Claimant.
The Claimant first returned to work following the accident on 28 September 2020. A dispute has arisen about the Claimant’s entitlement to weekly payments of statutory benefits for a closed period following his return to work.
Transitional matters
The Personal Injury Commission (the PIC) was established on 1 March 2021. These proceedings were commenced on 17 December 2020, before the PIC was established. In accordance with Sch 1 Pt 2 cl 14A and cl 14B of the 2020 Act, they constitute pending proceedings and pre-establishment proceedings that I am empowered to determine.
The dispute
It is agreed by the parties that the dispute relates to the Claimant’s entitlements to weekly payments of statutory benefits in accordance with s 3.8 of the Motor Accident Injuries Act 2017 (the MAI Act) for the period 18 January 2021 – 25 April 2021 (the closed period).
The Claimant’s position is that he suffered a partial loss of earning capacity during the closed period and that he is entitled to weekly payments in accordance with s 3.8.
The Insurer disputes that the Claimant suffers a loss of earning capacity. The Insurer also raises jurisdictional issues in relation to the dispute that I will address later in these reasons.
The parties agree that, for the purposes of s 3.8, the Claimant’s pre-accident earning capacity equates to $1,441net per week. The parties also agree that during the closed period the Claimant was certified by his general practitioner as having the capacity to work eight hours per day for normal hours.
Having conducted teleconferences with the parties and considered both s 52 of the Personal Injury Commission Act 2020 (the PIC Act) and Procedural Direction PIC2 I have determined that the matter can be determined on the papers. I am satisfied that sufficient information is available in connection with proceeding to allow me to determine the dispute without holding a formal hearing. The parties agree to me determining the dispute on the papers.
The decision under review
The decision under review is the Insurer’s internal review decision of 4 December 2020 (the IR decision). The IR decision was concerned with a review of a determination made by the Insurer on 20 November 2020 that found the Claimant had no loss of earning capacity as a result of accident related injuries. This finding by the Insurer resulted in the Insurer determining that the Claimant had no entitlement to weekly payments in accordance with
s 3.7 or s 3.8 of the MAI Act.
In requesting the internal review, the substance of the Claimant’s complaint was that, contrary to the Insurer’s decision, he did suffer a partial loss of earning capacity and that he was entitled to weekly payments in accordance with s 3.7 and s 3.8.
After reviewing the medical evidence, the Claimant’s pay records for the period
28 September 2020 – 29 November 2020, and relevant provisions in the MAI Act, the internal reviewer concluded as follows:
“80. Your most recent Certificate of Capacity dated 2 December 2020 reports that you have “capacity for some type of work from 2 December 2020 to 9 December 2020 for 8 hours/day normal days/week.”
81.The payslips provided to date confirm you have been working in excess of 8 hours/day, 5 days a week since returning to work on 28 September 2020.
82.I accept the overtime hours you work vary from week to week. I note in the week 12 October 2020 – 18 October 2020 you worked 40 normal hours and 12 hours of overtime earning $1934.46. I am satisfied this week is an accurate reflection of your current capacity to work, as it is the most hours you have worked since the subject accident to date.
Earning capacity assessment
83.Earning capacity is calculated on a net basis using the following formula. (pre-accident earning capacity – post-accident earning capacity) x 85%
84.Therefore, having regard to the above, your earning capacity after 78 weeks is calculated as follows: ($1441.00 - $1454.46) x 85% = $-11.55
Conclusion
85.Based on the above calculation, I am satisfied you have no loss of earning capacity as a result of injuries arising from the subject accident.”
Having made those findings, the internal reviewer maintained the Insurer’s initial decision in relation to the Claimant’s earning capacity.
The Insurer’s position in relation to the closed period is underpinned by the IR decision about the Claimant’s post-accident earning capacity. Put another way, on the basis that the IR decision determined that the Claimant had no loss of earning capacity the Insurer has determined that the Claimant is not entitled to weekly payments for the closed period.
Jurisdictional issue
The Insurer argues that the dispute about the Claimant’s earning capacity constitutes a medical assessment matter in accordance with Sch 2 cl 2(d) of the MAI Act, and that the Commission does not have jurisdiction to determine the dispute as a merit review matter. This argument proceeds on the basis that a dispute about the degree of impairment of an injured person’s earning capacity that has resulted from injury caused by a motor accident is declared to be a medical assessment matter for the purposes of Pt 7 of the MAI Act.
The Claimant submits that the dispute constitutes a merit review matter because it is about the amount of statutory benefits that is payable under Div. 3.3 (see Sch 2 cl 1(a)), and that the Commission has jurisdiction to determine it as such.
I informed the parties at the teleconference on 19 July 2021 that I had concluded the Commission does have jurisdiction to determine a dispute about the Claimant’s earning capacity as a merit review matter. A dispute of this type is not about “impairment of the earning capacity” of the Claimant. The dispute centres on s 3.8, which uses the term “loss of earning capacity” in s 3.8(1) and “post-accident earning capacity” in s 3.8(2). The term “impairment of earning capacity” is not found in s 3.8.
Further, while the term “impairment of earning capacity” is found in Pt 4 of the MAI Act (see for example ss 4.5(1)(a), 4.6(1)(a), 4.6(3), 4.8 & 4.9(1)(a)), that Part addresses entitlements to damages, not statutory benefits.
In my view, a dispute about loss of earning capacity in the context of s 3.8 is dispute about the amount of statutory benefits that is payable under Div. 3.3. Accordingly, it is a merit review matter.
The other matter that the Insurer has raised is that the dispute about the closed period has not been the subject of an internal review as required by s 7.11 of the MAI Act.
While that may be so, the basis upon which the Insurer has declined to pay weekly payments for the closed period, namely that the Claimant did not suffer a partial loss of earning capacity as a result of accident related injuries, was the subject of the IR decision. It is that decision that is the subject of this merit review. Accordingly, while I will not determine the Claimant’s entitlement to weekly payments during the closed period, I will conduct a merit review of the Insurer’s decision about to the Claimant’s earning capacity.
Relevant statutory provisions
Section 3.8 and Sch 1 cl 8 are central to the dispute. Those provisions, as they are relevant, are in the following terms:
“3.8 Weekly payments after second entitlement period (after week 78)
(1)A person who is injured as a result of a motor accident and suffers a total or partial loss of earning capacity as a result of the injury is entitled to weekly payments of statutory benefits under this section after the end of the second entitlement period, but only if the person—
(a) is at least 18 years of age (whether or not the person is an earner), or
(b) is under 18 years of age and is an earner. Note—
The person’s age after the second entitlement period is relevant to determining entitlement to statutory benefits after the second entitlement period. A person’s age at the date of the motor accident is not relevant. Schedule 1 defines when a person is an earner.
(2)A weekly payment of statutory benefits under this section is to be at the rate of—
(a) in the case of total loss of earning capacity—80%, or
(b) in the case of partial loss of earning capacity—85%,
of the difference between the person’s pre-accident earning capacity and the person’s post-accident earning capacity (if any) after the second entitlement period.
(3)A weekly payment of statutory benefits to a person under this section is not to exceed the maximum weekly statutory benefits amount less the person’s post- accident earning capacity (if any) after the second entitlement period.
(4)A weekly payment of statutory benefits to a person under this section is not to be less than the minimum weekly statutory benefits amount or the person’s pre- accident earning capacity, whichever is the lesser.
8 Meaning of “post-accident earning capacity”
(1)Post-accident earning capacity of an injured person means—
(a)…
(b) for any period after the second entitlement period—the weekly amount the person has the capacity to earn in any employment reasonably available to the person, determined on the basis of the person’s fitness for work in any such employment.
(2) …
(3)A person’s fitness for work after the second entitlement period is to be determined having regard to the following—
(a) the nature of the injury and the likely process of recovery,
(b) treatment provided and rehabilitation undertaken and the potential for further treatment and rehabilitation,
(c) the person’s training, skills and experience,
(d) the age of the person,
(e) any medical certificate provided by the injured person as to the person’s fitness for work.
(4)The Motor Accident Guidelines may make provision for the matters to be taken into account for the purposes of determining the employment reasonably available to a person in any period after the second entitlement period.”
Claimant’s Submissions
The Claimant relies on submissions dated 17 December 2020, 12 May 2021, 24 May 2021 and 6 July 2021. In summary, the Claimant submits that:
(a)While he returned to full time normal work duties on 28 September 2020 and attempted to return to work at his pre-accident capacity, he was not able to continue working in that capacity.
(b)Following a consultation with his general practitioner he was issued with an updated Certificate of Capacity dated 2 December 2020 which states that his capacity to work is 8 hours per day, 5 days per week as opposed to the 12 hours per day, 4 days per week he was working pre-accident.
(c)It would have been impossible to definitively conclude that he was able to resume and continue to work at pre-accident hours until a reasonable attempt was made to return to work.
(d)He made an attempt to return to work and has shown that he was incapable of continuing to work at pre-accident hours.
(e)His capacity as determined by his general practitioner ought to be accepted.
(f)He does have a loss of earning capacity post-accident and his weekly wages should not cease.
(g)The Insurer has improperly assessed all of the evidence available when determining his earning capacity and have disregarded the opinion of his general practitioner.
(h)The Insurer has inadequately calculated the weekly payments to which he is entitled.
(i)During the period in dispute, he was only working 40 hours per week as compared to before the accident when he was also working overtime.
(j)On 29 April 2021, he underwent surgery in the form of an anterior cervical discectomy and fusion (ACDF C3/4) recommended by Associate Professor Matthias Jaeger.
(k)The Certificates of Capacity confirm that he did not have full capacity for the closed period.
(l)The fact that he was awaiting surgery in that period reinforces the fact that he was partially incapacitated at that time.
The Insurer’s submissions
The Insurer relies on submissions dated 25 June 2020, 11 June 2021 and 12 July 2021. In summary, the Insurer submits that:
(a)The Claimant had a capacity to work in excess of the determined eight hours/day, normal days a week since returning to work on 28 September 2020.
(b)While the overtime available to the Claimant may vary from week to week, in the week of 12 October 2020 – 18 October 2020 the Claimant worked 40 normal hours and 12 hours of overtime earning $1934.46 gross or $1,449.46 net.
(c)Since returning to work the Claimant had demonstrated a capacity to work overtime hours when available.
(d)There was no evidence that the Claimant’s injuries had worsened so as to prevent him from working overtime.
(e)The Claimant’s earnings in the period 12 October 2020 – 18 October 2020 are an accurate reflection of his reasonable potential earning capacity which exceeds the pre-accident earning capacity.
(f)The Claimant’s pre-accident earning capacity was $1,441 (net). Given his demonstrated ability to earn $1,449.46 (net) the Claimant does not have a loss of earning capacity.
(g)The Claimant had no loss of earning capacity during the closed period.
The Claimant’s pre-accident work
At the time of the accident the Claimant was employed by South Coast Equipment Pty Ltd as a Plant Operator. He had been employed in that capacity for some 33 years. Pre-accident he worked an average of 42 hours a week, four days on and four days off. His shifts were approximately 12 hours long.[1]
[1] Claimant’s statement dated 31 October 2020 at [28] – [30].
Determination
While the Claimant’s entitlements to weekly payments during the closed period were not the subject of the IR decision, a critical matter that informed the Insurer’s decision about those entitlements was the subject of the IR decision, namely the Claimant’s earning capacity. As recorded earlier in these reasons, I will restrict my decision to this issue.
The Insurer does not dispute that the Claimant suffered injury to his neck, low back and right shoulder as a result of the accident. The Insurer paid the Claimant weekly payments until he returned to work after the accident and has been paying the Claimant weekly payments since he underwent neck surgery on 29 April 2021.[2]
[2] Report of Associate Professor Jaeger dated 31 May 2021.
Although the Insurer’s internal reviewer summarised a wide body of medical evidence and engaged with ss 3.7 and 3.8 together with Sch 1 cl 8 (which defines the term “post-accident earning capacity”), I have concluded that the Insurer placed too much weight on the Claimant’s ability to perform some overtime for a period after returning to work. In this regard, the Claimant’s pay records confirm that he received income for overtime work between
5 October 2020 – 29 November 2020.
The Insurer determined that the Claimant’s ability to work 40 normal hours and 12 hours of overtime in the week 12 October 2020 – 18 October 2020, earning $1,934.46 gross, was an accurate reflection of his capacity to work, as it was the most hours he had worked since the subject accident.
By placing so much emphasis on this consideration the Insurer has failed to adequately address the balance of the matters that are relevant to a determination of the Claimant’s post-accident earning capacity.
Clause 8(1)(b) states that post-accident earning capacity of an injured person means, for any period after the second entitlement period, the weekly amount the person has the capacity to earn in any employment reasonably available to the person, determined on the basis of the person’s fitness for work in any such employment.
A person’s fitness for work after the second entitlement period is to be determined having regard to:
(a)the nature of the injury and the likely process of recovery,
(b)treatment provided and rehabilitation undertaken and the potential for further treatment and rehabilitation,
(c)the person’s training, skills and experience,
(d)the age of the person,
(e)any medical certificate provided by the injured person as to the person’s fitness for work.[3]
[3] Sch 1 cl. 8(3).
True it is that Beraldo Lilli, in his report of 11 September 2020, expressed the opinion that it would be “safe and appropriate” for the Claimant to return to full time normal work duties on 28 September 2020, and that a Certificate of Capacity recorded that the Claimant was fit for some type of work for “normal hours/day/, normal days/week”. It is also the case that the Claimant was able to undertake overtime work for a period after his return to work in September 2020.
However, the Claimant’s post-accident earning capacity did not remain static, as demonstrated by the Certificate of Capacity dated 2 December 2020, which is referred to in the IR decision. The IR decision notes that this Certificate recorded that the Claimant had capacity for some type of work from 2 December 2020 – 9 December 2020 for “8 hours/day, 5 days a week”. The Certificate records that the Claimant “has fitness for some type of work (light duties)”. The Certificate does not state that the Claimant was fit for all work, or indeed his full pre-injury work including overtime. To the contrary, it supports his argument that he was suffering a partial loss of earning capacity at that time.
I have concluded that at the time the IR decision was made the evidence established that the Claimant was suffering a partial loss of earning capacity. The Insurer’s finding to the contrary was not, in my view, consistent with a fair assessment of the evidence and the matters referred to in Sch 1 cl. 8(3).
At the time of the IR decision, the Claimant was 54 years of age. He had been working as a plant operator for 33 years. He suffered significant injuries in the accident that have required surgery on two occasions. The Claimant did not return to work after the accident until September 2020.
On 2 December 2020, the Claimant’s general practitioner issued a Certificate of Capacity that recorded that he was fit for modified duties. He was not certified as being fit to undertake his pre-accident duties. The work reasonably available to him was modified duties as a plant operator with is pre-accident employer. While he was able to return to his pre-injury work for a period, and earn overtime for a period, things did not go to plan in terms of the Claimant returning to work without restrictions on an ongoing basis. The trajectory of the Claimant’s earning capacity was not linear. Consideration should have been given to this state of affairs when determining his earning capacity.
The Insurer is to determine the Claimant’s earning capacity by reference to the totality of the evidence and in accordance with Sch 1 cl. 8(1)(b) and 8(3).
In relation to the closed period, it is clear from the Certificates of Capacity dated 9 December 2020, 16 December 2020, 6 January 2021, 13 January 2021, 21 January 2021, 27 January 2021, 19 February 2021, 24 February 2021, 3 March 2021, 10 March 2021, 17 March 2021, 24 March 2021 and 1 April 2021, that Dr Gupta, the Claimant’s General Practitioner, considered that the Claimant was fit for some type of light duties work and was restricted in relation to lifting/carrying and his pushing/pulling ability. This evidence supports the Claimant’s case that he suffered a partial loss of earning capacity during the closed period.
The Certificates of Capacity form part of the body of evidence that the Insurer is to take into consideration when determining the Claimant’s earning capacity during the closed period.
Costs
The Claimant seeks costs in connection with these proceedings. The Motor Accident Injuries Regulation 2017 does not allow costs in a dispute of this type. I am not satisfied that exceptional circumstances exist that would allow the Commission to permit payment of the Claimant’s costs. In the circumstances I make no order as to costs.
Brett Williams
Member (Motor Accidents Division) | Merit Reviewer
Personal Injury Commission
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